ATTOM Data Solutions’ quarterly U.S. Home Affordability Report compares the current cost of owning a home – including mortgage payments, property taxes, and insurance – to historical averages. The report looks at how much income is needed to cover monthly homeownership expenses on a median-priced single-family home across 574 counties nationwide. According to the most recent release, affordability levels declined during the second quarter, mostly due to home price increases this spring. Rod Barber, ATTOM’s CEO, says prices have been moving higher. “The U.S. housing market has done an about-face following a downturn that threatened to usher in an extended period of flat or falling prices,” Barber said. “Whether this is just a temporary blip amid this year’s peak buying season or a sign of another extended price surge is anyone’s guess.” The report cites future mortgage rate increases, a cooling stock market, and recession as a few hypothetical factors that could soften prices, and overall affordability conditions, in the months ahead. However, absent those factors or an increase in available for-sale inventory, home buyers should continue to prepare for a competitive market. (source)

Fannie Mae’s Home Purchase Sentiment Index is a monthly survey of Americans which tracks perceptions of the housing market, mortgage rates and home prices, and whether it’s a good time to buy or sell a home. In June, the index was relatively flat, with few changes seen from the month before. Among the results, the component measuring whether respondents feel it’s a good time to buy a home was up 5 percent, while the share of participants who believe it’s a good time to sell fell 3 percent. Doug Duncan, Fannie Mae’s senior vice president and chief economist, says most other gauges were unchanged. “Home prices continue to be supported by the tight supply of homes available for sale and, compared to the end of last year, fewer respondents today believe home prices will decrease over the next 12 months,” Duncan said. “Additionally, consumers’ think mortgage rates will stay the same over the next year, whereas mid-to-late last year, most thought rates would continue going up.” Duncan believes the results are a sign home buyers are starting to adapt to the idea that affordability conditions have settled and will remain fairly steady in the coming months. (source)

According to the Mortgage Bankers Association’s Weekly Applications Survey, the average loan size for purchase applications fell last week to $423,500. That’s the lowest it has been since January. It also could be an indication of who’s most active in the housing market right now. Joel Kan, MBA’s vice president and deputy chief economist, says it shows buyers are more active in affordable areas. “This was likely driven by reduced purchase activity in some high-price markets and more activity in some of the lower price tiers as buyers search for more affordable options,” Kan said. But while buyers continue to search for more affordable options, overall demand for mortgage applications fell last week. It was the first decline in a month. Part of the reason for the decrease was a bump in average mortgage rates, which were up for most loan categories – including 30-year fixed-rate loans with both conforming and jumbo balances, FHA loans, and 15-year fixed-rate loans. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. (source)

The ability to search online listings of available homes for sale changed the way home buyers shop houses. These days, the majority of buyers first look online to both get a feel for what’s available in their target area and to evaluate what they might be able to afford. Online listings can certainly be a helpful tool, but they also can cause stress, according to one new survey. The survey found 66 percent of young Americans routinely go online to check the estimated value of homes belonging to their friends. Among them, 59 percent say they do it to measure their own income and worth. This, not surprisingly, leads to feelings of stress and concern among 79 percent of the people who do it. That’s a pretty good reason to restrict yourself to only searching listings if you’re looking for ideas or hoping to better educate yourself about your local market. Otherwise, you may find yourself with a bad case of home envy. (source)